In this article, we will be looking at the 10 best finance stocks that pay dividends. If you want to skip our detailed analysis of the finance sector, you can go directly to the 5 Best Finance Stocks that Pay Dividends.
Bloomberg’s recorded data showing sector performance in the market so far this year has recorded a 0.13% gain from the financial industry, with the insurance sector contributing a rise of 0.32% and diversified financials contributing about 0.36%. At the same time, a Russell Investments report on 2021 insight into the financials industry has offered a more optimistic perspective on the global economy’s and the financials sector’s full-fledged recovery as well. All in all, moving into the third quarter of 2021, we can say that the financials sector and finance stocks like Morgan Stanley (NYSE: MS), Bank of America Corporation (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), and The Goldman Sachs Group, Inc. (NYSE: GS) are gaining headway.
According to Russell Investments, by the middle of June 2021, American and European vaccination rates had managed to reach about 50%, while also gaining momentum in other regions like Japan. As such, the recovery and reopening of the global economy seemed nigh. The economic recovery can be witnessed in the fact that the S&P 500 in the US showcased a growth in earnings that far exceeding consensus estimates for the first quarter of 2021. The earnings growth for that quarter stood at 52% as compared to the estimates of 24%. As such, Russell Investments has made statements claiming that more robust economic growth can be expected in the US during the latter half of this year, with an expected 7% growth in the GDP of the US for 2021.
With the recovering and steadily reopening economy, investors are beginning to pour money into the financial industry and the banking sector among other related sectors. By May, about $32 billion was invested in broad financial stocks, a value that already set a record for the year 5 months in. Hence, bank and finance stocks have begun gaining momentum and popularity among investors who are eagerly awaiting to reap the fruits of economic recovery while everyone vies for a spot in the financials sector. Hence, we have compiled a list of the best finance stocks that pay dividends to pinpoint some of the most popular stocks among investors today.
Investing is becoming difficult by the day, even for the smart money. The entire hedge fund industry is feeling the reverberations of the changing financial landscape. Its reputation has been tarnished in the last decade, during which its hedged returns couldn’t keep up with the unhedged returns of the market indices. On the other hand, Insider Monkey’s research was able to identify in advance a select group of hedge fund holdings that outperformed the S&P 500 ETFs by more than 124 percentage points since March 2017. Between March 2017 and May 29th 2021 our monthly newsletter’s stock picks returned 206.8%, vs. 91% for the SPY. Our stock picks outperformed the market by more than 115 percentage points (see the details here). That’s why we believe hedge fund sentiment is an extremely useful indicator that investors should pay attention to. You can subscribe to our free newsletter on our homepage to receive our stories in your inbox.
Insider Monkey tracks data for about 866 hedge funds, which is what we have used to pick the finance stocks that are among the most popular with hedge funds. We have also picked those stocks that have mostly positive analyst ratings and strong fundamentals. Finally, we have only considered stocks with a dividend yield of at least 2%, ranking the stocks from the lowest to the highest dividend yield.
Let’s now look at the 10 best finance stocks that pay dividends.
Best Finance Stocks that Pay Dividends
10. T. Rowe Price Group, Inc. (NASDAQ: TROW)
Number of Hedge Fund Holders: 26
Dividend Yield: 2.1%
T. Rowe Price Group, Inc. (NASDAQ: TROW) is an investment management company providing financial services to individuals, institutional investors, retirement plans, financial intermediaries, and institutions. It ranks 10th on our list of the best finance stocks that pay dividends.
Deutsche Bank’s Brian Bedell raised his price target on T. Rowe Price Group, Inc. (NASDAQ: TROW) from $171 to $185 this July, while keeping his Hold rating on the shares.
In the first quarter of 2021, T. Rowe Price Group, Inc. (NASDAQ: TROW) had an EPS of $3.01, beating estimates by $0.07. The company’s revenue was $1.83 billion, up 24.9% year over year and also beating estimates by $21.25 million. T. Rowe Price Group, Inc. (NASDAQ: TROW) has also gained 29.11% in the past 6 months and 40.40% year to date.
By the end of the first quarter of 2021, 26 hedge funds out of the 866 tracked by Insider Monkey held stakes in T. Rowe Price Group, Inc. (NASDAQ: TROW) worth roughly $303 million. This is compared to 35 hedge funds in the previous quarter with a total stake value of approximately $360 million.
Like Morgan Stanley (NYSE: MS), Bank of America Corporation (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), and The Goldman Sachs Group, Inc. (NYSE: GS), T. Rowe Price Group, Inc. (NASDAQ: TROW) is a good finance stock to invest in.
9. The Goldman Sachs Group, Inc. (NYSE: GS)
Number of Hedge Fund Holders: 77
Dividend Yield: 2.1%
The Goldman Sachs Group, Inc. (NYSE: GS) operates through its Investment Banking, Global Markets, Asset Management, and Consumer & Wealth Management segments to provide financial services for corporations, institutions, governments, and individuals. The company operates globally and ranks 9th on our list of the best finance stocks that pay dividends.
Oppenheimer’s Chris Kotowski has raised his price target on The Goldman Sachs Group, Inc. (NYSE: GS) to $540 just this July while holding on to his Outperform rating on the shares.
In the second quarter of 2021, The Goldman Sachs Group, Inc. (NYSE: GS) had an EPS of $15.02, beating estimates by $4.84. The company’s revenue was $15.39 billion, up 15.74% year over year and also beating estimates by $2.99 billion. The Goldman Sachs Group, Inc. (NYSE: GS) has also gained 32.75% in the past 6 months and 41.15% year to date.
By the end of the first quarter of 2021, 77 hedge funds out of the 866 tracked by Insider Monkey held stakes in The Goldman Sachs Group, Inc. (NYSE: GS) worth roughly $5.05 billion. This is compared to 77 hedge funds in the previous quarter with a total stake value of approximately $4.607 billion.
Like Morgan Stanley (NYSE: MS), Bank of America Corporation (NYSE: BAC), and JPMorgan Chase & Co. (NYSE: JPM), The Goldman Sachs Group, Inc. (NYSE: GS) is a good finance stock to invest in.
Artisan Partners, a high value-added investment management firm, mentioned The Goldman Sachs Group, Inc. (NYSE: GS) in its first-quarter 2021 investor letter. Here’s what they said:
“Financial services firm Goldman Sachs is a best-in-class franchise with a premier brand that attracts top talent and sustains market share across its businesses. We believe this has helped Goldman weather recent market volatility. In addition to de-levering risk-weighted assets, Goldman is also growing its digital investment footprint through the expansion of features on its Marcus Invest platform. The company’s stability—and ability to grow its brand even in tough times—has kept us invested over the long term.”
8. The Blackstone Group Inc. (NYSE: BX)
Number of Hedge Fund Holders: 49
Dividend Yield: 2.8%
The Blackstone Group Inc. (NYSE: BX) operates as an alternative asset management firm with a focus on real estate, private equity, hedge fund solutions, credit, and other related areas. It ranks 8th on our list of the best finance stocks that pay dividends.
Stephen Biggar, an analyst at Argus, has raised the firm’s price target on The Blackstone Group Inc. (NYSE: BX) to $125, a $25 jump from its previous price target of $100. Biggar has a Buy rating on the company’s shares as well, in light of The Blackstone Group Inc.’s (NYSE: BX) Q2 earnings beat.
In the second quarter of 2021, The Blackstone Group Inc. (NYSE: BX) had an EPS of $0.82, beating estimates by $0.04. The company’s revenue was $2.12 billion, up 90.29% year over year and also beating estimates by $201.17 million. The Blackstone Group Inc. (NYSE: BX) has also gained 71.49% in the past 6 months and 76.67% year to date.
By the end of the first quarter of 2021, 49 hedge funds out of the 866 tracked by Insider Monkey held stakes in The Blackstone Group Inc. (NYSE: BX) worth roughly $1.62 billion. This is compared to 54 hedge funds in the previous quarter with a total stake value of approximately $1.45 billion.
Like Morgan Stanley (NYSE: MS), Bank of America Corporation (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), and The Goldman Sachs Group, Inc. (NYSE: GS), The Blackstone Group Inc. (NYSE: BX) is a good finance stock to invest in.
ClearBridge Investments, an investment management firm, mentioned The Blackstone Group Inc. (NYSE: BX) in its second-quarter 2021 investor letter. Here‘s what they said:
“We funded the shift primarily with trims in Blackstone following big gains in this name. Blackstone is a long-term holding that have been and remain core holdings. During the quarter, however, we took gains and resized the positions to reflect their current risk-reward post strong increases in the stocks.
Blackstone has delivered phenomenal performance for many years but until the last year or two its success went unrewarded by investors. This began to change when it converted from a partnership to a C-corp and was turbocharged in the second quarter as the stock became eligible for inclusion in broad market indexes, which will drive greater structural demand for the shares. While we continue to be very constructive on the company and anticipate remaining significant holders for years to come, considering the 50% year-to-date rise in the shares, we shaved down the position.”
7. Apollo Global Management, Inc. (NYSE: APO)
Number of Hedge Fund Holders: 44
Dividend Yield: 3.1%
Apollo Global Management, Inc. (NYSE: APO), a private equity firm with a focus on investments in credit, private equity, and real estate, is next on our list of the best finance stocks that pay dividends and ranks 7th. Its investments include traditional buyouts, recapitalization, and debt investments, among a range of others.
William Katz from Citigroup has raised his price target on Apollo Global Management, Inc. (NYSE: APO) from $72 to $76. Katz also has a Buy rating on the company’s shares.
In the first quarter of 2021, Apollo Global Management, Inc. (NYSE: APO) had an EPS of $0.66, beating estimates by $0.08. The company’s revenue was $512.93 million, up 21.69% year over year and also beating estimates by $15.69 million. Apollo Global Management, Inc. (NYSE: APO) has also gained 20.86% in the past 6 months and 24.43% year to date.
By the end of the first quarter of 2021, 44 hedge funds out of the 866 tracked by Insider Monkey held stakes in Apollo Global Management, Inc. (NYSE: APO) worth roughly $2.36 billion. This is compared to 30 hedge funds in the previous quarter with a total stake value of approximately $2.05 billion.
Like Morgan Stanley (NYSE: MS), Bank of America Corporation (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), and The Goldman Sachs Group, Inc. (NYSE: GS), Apollo Global Management, Inc. (NYSE: APO) is a good finance stock to invest in.
6. MetLife, Inc. (NYSE: MET)
Number of Hedge Fund Holders: 32
Dividend Yield: 3.2%
MetLife, Inc. (NYSE: MET) provides insurance, annuities, employee benefits, and asset management services across the globe. The company operates in the life and health insurance industry and ranks 6th on our list of the best finance stocks that pay dividends.
MetLife, Inc.’s (NYSE: MET) price target at Credit Suisse was raised this May from $55 to $68. Analyst Andrew Kligerman, who raised the price target, also has an Outperform rating on MetLife, Inc. (NYSE: MET) shares.
In the first quarter of 2021, MetLife, Inc. (NYSE: MET) had an EPS of $2.20, beating estimates by $0.68. The company’s revenue was $15.56 billion, up 0.16% year over year but missing estimates by $459.56 million. MetLife, Inc. (NYSE: MET) has also gained 15.01% in the past 6 months and 25.07% year to date.
By the end of the first quarter of 2021, 32 hedge funds out of the 866 tracked by Insider Monkey held stakes in MetLife, Inc. (NYSE: MET) worth roughly $1.14 billion. This is compared to 37 hedge funds in the previous quarter with a total stake value of approximately $983 million.
Like Morgan Stanley (NYSE: MS), Bank of America Corporation (NYSE: BAC), JPMorgan Chase & Co. (NYSE: JPM), and The Goldman Sachs Group, Inc. (NYSE: GS), MetLife, Inc. (NYSE: MET) is a good finance stock to invest in.
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Disclosure: None. 10 Best Finance Stocks that Pay Dividends is originally published on Insider Monkey.
